CORRESP 1 filename1.htm

The table below was prepared and faxed to Ms. Angela Connell, Senior Accountant, Division of Corporation Finance, Securities and Exchange Commission, on April 6, 2006, following a telephone conference call on April 5, 2006, between the Staff of the Commission and MicroFinancial Incorporated to discuss previously received Staff comments.

 

MicroFinancial Incorporated

Allowance for Credit Losses

January 1, 1996 - December 31, 2005

 

(Amounts in $Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

Jan-Feb

 

1996

1997

1998

1999

2000

2001

2002

 

2003

2004

2005

2006

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Originations

$143,200

$129,064

$153,819

$223,446

$236,763

$155,308

$111,829

 

$3,429

$920

$7,296

$2,139

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Receivables

$247,633

$258,230

$280,875

$362,721

$452,885

$438,723

$367,173

 

$194,898

$69,181

$33,004

$32,602

Annual % Change

 

4.28%

8.77%

29.14%

24.86%

-3.13%

-16.31%

 

-46.92%

-64.50%

-52.29%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Receivables> 90 Days

Not available

 

$28,085

$46,014

$80,636

$137,607

 

$85,883

$29,673

$16,101

$15,825

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance, Beginning

$15,952

$23,826

$26,319

$24,850

$41,719

$40,924

$45,026

 

$69,294

$43,011

$14,963

$8,714

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision

19,822

21,713

19,075

37,836

36,029

54,092

88,948

[1]

59,758

47,918

10,468

722

 

 

 

 

 

 

 

 

 

 

 

 

 

Charge-offs

(15,675)

(24,290)

(28,750)

(35,957)

(56,081)

(67,464)

(76,443)

 

(93,153)

(81,763)

(22,806)

(1,268)

Recoveries

3,727

5,070

8,206

14,990

19,257

17,474

11,763

 

7,112

5,797

6,089

1,005

Net Charge-offs

(11,948)

(19,220)

(20,544)

(20,967)

(36,824)

(49,990)

(64,680)

 

(86,041)

(75,966)

(16,717)

(263)

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance, Ending

$23,826

$26,319

$24,850

$41,719

$40,924

$45,026

$69,294

 

$43,011

$14,963

$8,714

$9,173

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision less Net Chg-offs

$7,874

$2,493

$(1,469)

$16,869

$(795)

$4,102

$24,268

 

$(26,283)

$(28,048)

$(6,249)

$459

Allowance less Net Chg-offs

$4,004

$4,606

$5,775

$3,883

$4,895

$(9,066)

$(19,654)

 

$(16,747)

$(32,955)

$(1,754)

$8,451

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance : Ending Receivables

9.62%

10.19%

8.85%

11.50%

9.04%

10.26%

18.87%

 

22.07%

21.63%

26.40%

28.14%

Allowance : Receivables > 90 Days

N/A

N/A

N/A

148.55%

88.94%

55.84%

50.36%

 

50.08%

50.43%

54.12%

57.97%

 

 

 

 

 

 

 

 

 

 

 

 

 

Recoveries : Chargeoffs

23.8%

20.9%

28.5%

41.7%

34.3%

25.9%

15.4%

 

7.6%

7.1%

26.7%

79.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

Cumulative Gross Originations

N/A

$272,264

$426,083

$649,529

$886,292

$1,041,600

$1,153,429

 

$1,156,858

$1,157,778

$1,165,074

$1,167,213

Cumulative Net Chg-offs

N/A

(31,168)

(51,712)

(72,679)

(109,503)

(159,493)

(224,173)

 

(310,214)

(386,180)

(402,897)

(403,160)

 

 

 

 

 

 

 

 

 

 

 

 

 

Cumulative Net Chg-offs :

Cumulative Gross Originations

N/A

11.45%

12.14%

11.19%

12.36%

15.31%

19.44%

 

26.82%

33.36%

34.58%

34.54%

 

[1] This provision includes an additional $35 million related to dealer receivables and delinquent accounts associated with the Tolling Agreement with the Attorneys General